Name

Mohd Shamsuziran Bin Ismail

Matrix No. H/P No.

: :

2011642272 0199891791

INTRODUCTION AND ELEMENT OF COSTS

a) List down three (3) main objectives of cost accounting. i. ii. iii. Cost ascertainment To determine cost and identify the sources of each cost and who is responsible for it. Planning and controlling costs to formulate plans based on actions and monitor closely all costs related to the plans Decision making perform some analysis and choose the best plan or project to be implemented.

b)

Explain three (3) differences between financial accounting and cost accounting. NO. i. financial accounting The users are mainly the external users such as creditors, tax authority, government, banks and potential shareholders Reports are published annually or half yearly Data is past information or cost accounting. The users are internal users who are the managers, owners, shareholders and staffs.

ii.

iii.

Reports are prepared daily, monthly, quarterly or yearly depends on the needs historical Data or information is futuristic in nature. Use past or present data to assist in planning and controlling the operations.

c)

Explain two (2) similarities between financial accounting and cost accounting. i. ii. Concerns with classifying, recording, summarizing and interpreting the business transactions and data information . Measure the performance of the business by calculating some ratios, evaluate the performance of the manager by comparing actual and planned performance and this will give rise to variance. Corrective actions can be taken for those significant variances. Both have guidelines and procedures that can be used accordingly. Both have the accountability and responsibility to ensure all data or information are properly recorded and performance are reported to top management.

iii. iv.

d)

Explain the following term with examples:

Cost Money or cash equivalent paid for expenses incurred Eg : Ringgit Malaysia, Wages Cost centre Are function or location where cost can be collected or charged. There are three types of cost centres : 1) Production cost center actual production takes place Eg : Cutting department, Machine department, Assembly department 2) Process cost centre a specific process or a continuous sequence or operation are performed. Eg : Mixing, Boiling and Sterillising 3) Service cost centre provide services to the production or process cost centre. Eg : Maintenance department, Canteen department, store department and etc Cost unit A quantitative unit of product or service to which costs can be related to. The nature of the cost unit will depend on the type of good being produced. Eg : kilowatt hours is cost unit determine electric cost litres is a cost unit to determine petrol cost kilograms is cost unit to determine material cost no of hours worked is a cost unit to determine labour cost.